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Union Budget 2011 had significant and good news for individual tax payers after a long time. Over the last 15 years or so, the number of tax slabs had been reduced and taxes have been rationalized. However, with time, tax slabs need to be tweaked further in keeping with growing income and to take account of the effect of inflation over the years, among other things.

That is exactly what the Finance Minister –Mr. Pranab Mukherjee did a year ago. He lowered tax liabilities across the board. And the outcomes were evident enough.

Have a look on them: men who were not senior citizens, needed to pay the exemption limit, up from Rs.1.50 lakhs to 1.6 lakhs which immediately brought down the burden by Rs.10,000/- for the financial year.

For all those with an income of Rs.5.00 lakhs or more, the savings and taxes works out to be about Rs.44,000/- now, which is a return of near to 8.8% on an investment of Rs.5.00 lakhs.

The tax rates for men who are not senior citizens:

Income level in Rupees Lakhs

Tax Rate

Upto Rs.1.6 lakhs

-NIL-

Between Rs.1.60 lakhs to Rs.3.00 lakhs

10% of the income exceeding Rs.1.6 lakhs and less than Rs.3.00 lakhs

From Rs.3.00 lakhs to Rs.5.00 lakhs

Rs.14,000/- + 20% of the income exceeding Rs.3 lakhs and less than equal to Rs.5.00 lakhs

Above Rs.5.00 lakhs

Rs.54,000/- + 30% of income exceeding Rs.5.00 lakhs and above and more

For women, who are not senior citizens:

Income level in Rupees Lakhs

Tax Rate

Upto Rs.1.9 lakhs

-NIL-

Between Rs.1.90 lakhs to Rs.3.00 lakhs

10% of the income exceeding Rs.1.9 lakhs and less than Rs.3.00 lakhs

From Rs.3.00 lakhs to Rs.5.00 lakhs

Rs.11,000/- + 20% of the income exceeding Rs.3 lakh and less than equal to Rs.5.00 lakhs

Above Rs.5.00 lakhs

Rs.51,000/- + 30% of income exceeding Rs.5.00 lakhs and above and more

For all senior citizens:

Income level in Rupees Lakhs

Tax Rate

Upto Rs.2.40 lakhs

-NIL-

Between Rs.2.40 lakhs to Rs.3.00 lakhs

10% of the income exceeding Rs.2.40 lakhs upto 3.00 lakhs.

From Rs.3.00 lakhs to Rs.5.00 lakhs

Rs.6000/- + 20% of the income exceeding Rs.3 lakh and less than equal to Rs.5.00 lakhs

Above Rs.5.00 lakhs

Rs.46,000/- + 30% of income exceeding Rs.5.00 lakhs and beyond

Please note that there will be a 10% surcharge and 3% education cess on tax payment of any individual’s income above Rs.10.00 lakhs.